Morphogenesis of the placenta entails fusion between the chorion and the allantois, tissues that are initially well-separated from each other. Shortly after fusion, the allantois creates an umbilical circulation that culminates in the intimate alignment of the fetal and maternal blood vessels. Although correct formation and differentiation of the allantois is essential for fetal health and survival, a total of only three papers on allantoic development are available in the current literature. We have recently reported that the transformation of mesodermal cells into endothelial cells occurs along a spatial gradient, with allantoic cells more distal to the embryo farther along in their developmental program than those more proximal. These results predict that gene expression and morphological differentiation will occur along a gradient. In support of our prediction, at least one molecule relevant to placental development, VCAM-1, is expressed in a gradient along the proximodistal axis of the allantois. Further, in the rat, morphological differentiation in the allantois appears to occur first in the distal region before spreading to the base. On the basis of these findings, we hypothesize that a portion of the mesodermal cells emigrating from the primitive streak undergoes a gradual change in the expression of several critical genes as they join the developing allantois and translocate proximodistally. These changes in gene expression orchestrate transformation of primitive mesodermal cells into specialized umbilical endothelial cells. Four aims are proposed. In the first aim, allantoic cell morphology will be examined during development of the murine allantois in both the light and electron microscopes. In the second aim, spatio-temporal analyses of gene expression will be carried out in the allantois. Focus will be on genes already known to be involved in vasculogenesis. In the third aim, cells from the base of donor allantoises will be transplanted into unlabeled hosts and examined for corresponding changes in gene expression and morphology as they traverse the allantois, combining aims 1 and 2. In the fourth aim, regional developmental potency of the allantois will be extended to include earlier and later stages than previously examined. A study on the role of the posterior primitive streak in organizing and patterning differentiation in the allantois will also be initiated. Together, results of these aims will enable us to correlate three fundamental parameters of differentiation of mesoderm into the endothelial cell lineage: gene expression, cell morphology and allantoic potency. Further, results of our experiments will shed light on the mechanism of formation of the endothelial cell lineage.